Strategy Forum / Panelist

Joshua Gans

Rotman School of Management

University of Toronto

Canada

While Gans’ research interests are varied, he has developed specialties in the nature of technological competition and innovation, industrial organization, and regulatory economics. He is the Strategy Editor of Management Science. He has written several books including The Disruption Dilemma (MIT Press, 2016) and Prediction Machines: The Simple Economics of Artificial Intelligence (HBR Press, 2018).

Voting History

Statement Response
Corporate investments in diversity, equity, and inclusion should be expected to generate a monetary return on investment. Neither agree nor disagree “To the extent that entrenched bias leads to less productive people, then eliminating that bias is profitable. No argument there. But as for investments to eliminate that bias, these often include brief interventions that I don’t see leading to long-term change. Change is hard. It requires management with a vision as to how a company ought to run, the building of relational contracts, and a broad strategy that integrates internal alignment with external positioning. As soon as these things get a name, like DEI, I worry that means that the hard work of change is being packaged into the lure of the easy out. Then people want to identify costs and measure benefits. This is an area where that simply isn’t going to cut it.”
The era of dominance for Tesla in the EV market is coming to an end. Strongly disagree “There are new entrants in EVs against Tesla from startups and old non-EV incumbents. But the design of a Tesla so integrates software and hardware that it is architecturally difficult to replicate. Add to that the likelihood that its brand and quality are a decade ahead, and you have to conclude that it is premature to believe its market leadership will be effectively challenged anytime soon.”
Online education and specialized degrees will supplant the traditional two-year full-time MBA.  Disagree “The death of the MBA has been forecast for years. While it is easy to imagine the knowledge taught going online, the credentials and the cohort effects are another matter. The best bet at the moment is that it will continue, although a reduction to one year is not out of the question with a more specialized add-on. (Basically, it would be convenient for me if the MBA doesn’t die before 2038.)”
Starbucks’s plans to increase wages for nonunionized workers is a shortsighted strategy. Agree “Unionization is coming back. It was short-sighted policies that led to that. If Starbucks is trying to stem that trend, it is unlikely to be just an issue of wages. It is more likely to be broader work conditions. But changing those requires investment and a longer-run focus.”
Sanctions against Russia will cause multinational companies to consider human rights protections in supply chains more broadly. Neither agree nor disagree “The sanctions against Russia have shut down many multinational corporations’ activities in Russia. Had they considered human rights obligations, would they have preemptively mitigated that risk? It is unlikely. Human rights abuses didn’t lead to this degree of sanctions. Russia’s military aggression did, and companies had assessed a low probability that would have taken place. I think this might make some more mindful, but the real effects are hard to parse.”
Blockchain is more likely to be a sustaining innovation than a disruptive innovation in the financial sector. Disagree “A sustaining innovation is, at its heart, aligned with the architecture of the current system. Blockchain — at least in its more talked about forms (i.e., permissionless) — is not at all aligned with that. Importantly, it seeks to operate safely without usual trust mechanisms, which is precisely the opposite of what goes on in finance. To the extent it succeeds (still a big if), blockchain will end up being disruptive, as it will require new substitute architectures to emerge.”
The field of strategic management has overlooked the role of corporate purpose in driving business performance. Strongly disagree “The usual assumption on corporate purpose is that it is maximizing shareholder value and occasionally some other stuff. The hard part is measuring business performance. If it is simply profits or equity value, then the literature is pretty clear that having a corporation focused on that yields better performance on that metric. The only twist comes when we think of the time dimension in that those managing the corporation may have a different time horizon than those measuring performance. But this is largely a semantic issue.”
Socially responsible mutual funds are more of a marketing tool than a solution to environmental and social problems. Neither agree nor disagree “I mean, who really knows? If you forgo profitable investments because they aren’t socially responsible, that is a potentially expensive marketing campaign. But given that there are lots of funds out there, does doing this really raise the cost of capital for socially irresponsible investing? It seems unlikely. There just isn’t a substitute for directly impacting the returns to social irresponsibility.”
When hackers take data hostage, companies should pay the ransom. Agree “OK, clearly if paying the ransom won't release the bits held hostage, they shouldn't pay. But if it will solve the problem, it makes sense for them to do it, get over the immediate crisis, and then invest heavily to stop it [from] happening again. Sure, that makes it more likely others will be hacked, but that is a broader policy question. These days companies with critical systems online now have to spend [money] on security. Add that to the list of expenses caused by crime.”
Relaxing the rules around physical presence in the office will improve employee productivity and firm performance. Agree “I think the pandemic has shown people what they value about the office and what they don’t value. It is likely that what they value is less than the five to six days a week they were in the office, and part of the reason is productivity improvements. But also, if there were rules, they were likely causing anxiety with family and other requirements for flexibility. Being more flexible will help but, at the same time, it will require more coordination to ensure when people are present, other people are present. It will be more of a change in culture and norms.”
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Agree “Business strategy is the process by which you choose things. Will that process change? Yes. The pandemic gave rise to lots of forced experimentation, which may lead to changes in choices. The takeaway should be that businesses were doing too little experimentation before. This is what may well change.”
The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Agree “COVID-19 and future pandemics make cities unsafe. To the extent that the benefits of being located in a denser place are marginal, we would expect relocation to be seriously entertained, especially as companies become more familiar with online interactions.”
The California Consumer Privacy Act will undermine the targeted advertising market by giving consumers the right to opt out of allowing companies to sell personal data to third parties. Disagree “My guess is that there are ways to get data in any case by self-collection rather than a market. But even so, it is unclear how many consumers will opt out as a result of this law. So in the end, targeted advertising will likely be just fine.”
In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Agree “Regardless of politics, no profit-oriented business is going to take real risks.”
Antitrust policy should intervene more decisively to limit the scope of large technology platforms. Strongly disagree “I interpret ‘limiting scope’ as not allowing platforms to enter new markets or otherwise restrict their productive activities. This is bad for competition and innovation. Instead, antitrust should focus on making it easier for anyone to provide better products in any market.”
U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Disagree “It is unlikely they want to pollute more if there is no enforcement. To be sure, if they expended fixed costs to adhere, maybe little will change. But operationally, their incentives will be diminished.”
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation.
This shift will have material impact on the well-being of U.S. workers.
Disagree
“I still believe that corporations mostly act in their own self-interest. Even if some other goals come into play, it is unclear whether this would directly impact on workers any more than it may be efficient practice to treat workers a certain way. [Having] broader goals does not imply charity.”
In the next decade, we will see the first sustainably profitable private commercial activities in space. Agree “The cost of putting objects into space is falling dramatically. When this type of technological change occurs, it spurs entrepreneurial activity. While it is hard to know precisely what type of venture will be profitable, I would be willing to bet there will be at least one by 2030.”
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage. Agree “A 5G network that is built earlier in a region moves businesses in that region into the future sooner. They can experiment with new products and services and be further up the learning curve. The cost is that global demand for those services is still far off, which diminishes their relative advantage.”
The increase in stock market volatility that began in 2018 will last for another three to five years. Neither agree nor disagree “I see this question as your regular reminder that nothing with regard to the stock market, including its volatility, is predictable over any time period.”